Reactive Traders Getting Punished

Reactive traders who chase weakness or strength have been getting punished badly lately. For most of the past year it did not matter if one was reactive as market endlessly trended in whatever direction they were going. This no longer seems to be the case.

1 comment:

Interesting observation. Maybe we really do get a range bound market for a while (something that has been predicted many times in the last year but hasn't really come to fruition) that would reward buying weakness and selling strength. Kind of like '04.

Tough to really know until it's too late though. The risk here is that you buy a falling knife as the downside risk is very high.

As you pointed out, the "easy" money has been made here from the bottom. We're very much on a tenuous edge as we could accelerate up for a bit, or drop off the edge and head to a lower bottom.

I'm sitting mostly in cash with a small miner/gold position. It's killing me as I sold a bunch before it has taken off to the upside here. But we are seeing a negative divergence on the charts and waning strength that may lead to a sharp sell off. But gold may yet break out to new highs dragging the miners up with it, of course. Tough spot here.

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I do not offer investment advice on this site. Under no circumstances does this information represent a recommendation to buy, sell or hold any security. The information is for educational purposes only. I may hold a position in the securities discussed. Positions may change at any time without notice.